Spain’s plan is 100% house tax on foreigners: will it fix the housing crisis? , Housing news

Last week, Spain’s socialist Prime Minister Pedro Sanchez announced several measures, including 100 percent tax on the price of houses purchased by foreigners to deal with the country’s housing crisis.

The purpose of the Sanchez is to stop the residents of the non-European Union from buying houses in the country. Sanchhez said, “Spain’s residence should be for Spanish people to live, as well as for those migrants who come here to work and create life and contribute to the development and prosperity of our country.” Vehicle.

Lack of housing and rising prices have provoked people to protest tourists in many cities such as Barcelona and Seville, as foreign buyers and large -scale tourism are seen as factors contributing to crisis.

So how serious the housing crisis is and will the new measures deal with the issue that the gradual governments have failed to address?

What is Spain’s new property tax proposal?

Sanchez has proposed 12 steps to deal with the country’s stressful housing market, with some increase in some of Europe’s highest price last year by 8.3 percent.

100 percent tax will affect foreign buyers who bought 27,000 apartments in 2023. In the third quarter of 2024, about 15 percent of all real estate properties were purchased by foreigners, according to the Association of Registrar.

Sanchez said on the stage, “He (foreign buyers), not to live, but to speculate, to make money with them, there is something that we cannot tolerate in the context of the scatter.” “, Monday in Madrid.

The Spanish leader also proposed high taxes on a holiday fare to ensure that tourists were rented apartments “like a business”. “It is not appropriate that people who own three, four, five apartments for short -term fares, they pay less tax compared to the hotel,” said Sanchez.

Other proposals include tax brakes and incentives to provide affordable housing for zamindars, especially to rent young people and to high-deserg areas.

What other measures have he announced?

Sanchez, who heads the Left coalition government under the leadership of his Spanish Socialist Workers’ Party, planned to amend laws to accelerate the construction of new houses and expand the availability of land for private construction.

Around 600,000 new homes are required by the end of 2025, but according to Bank of Spain, some 90,000 houses are being constructed each year.

Sanchez insisted that the housing was the top priority of his government, but warned that there was no “magic wand” to resolve the issue. The Spanish Prime Minister announced the transfer of two million square meters of land to a new, public company to build “thousands and thousands” of affordable social housing units.

Under social housing, buildings are subsidized by the government and owned or managed by local or central government, or non -profit organizations.

Sanchez said that the social residence is only 2.5 percent of the Spain market, below space in other major European Union countries, such as 14 percent in France and 34 percent in the Netherlands.

Without underlining a detailed plan, Sanchez also said that the government plans to fight fraud in a holiday fare, such as platforms such as AirBNB.

Fraud in fraud in Spain’s Holiday Rental Market involves unauthorized sublating of assets for tourists without fake property listing and owners’ consent, and fare unlicensed that fail to meet legal or safety standards.

In December 2024, Spanish authorities started an investigation into AirBNB to fail to remove thousands of misleading fare offers on their platform.

Meanwhile, the Golden Visa launched in 2013 will be abolished. The program allowed investors of the rich non-European Union to reside to obtain residentity by purchasing real estate projects of at least 500,000 euros (about $ 513,000).

Will qualities and people affect the most?

Tax will apply to individuals who are neither citizens nor residents of the European Union, and often use properties as holidays or investments.

The United Kingdom buyers top the list of foreign property buyers in Spain, about 10 percent of all the acquisitions by non-residents in the last quarter of 2023.

According to official data, housing and high fare deficiency means that people have been excluded from the market, with the rate of 24 percent increase for 28,000 people since 2012.

Spain’s new measures aim to help inhabitants, especially in cities and coastal areas such as the Balieric Islands, and in Canary Islands, where the fare has increased due to high demand and limited supply.

When will it apply?

The exact timeline has not been specified to implement tax on foreign buyers and other proposed measures.

Proposals require approval in Spain’s fragmented Parliament, where the minority alliance of Sanchez may face a challenge in passing the law.

How cheap is the housing in Spain?

Housing in Spain has become particularly expensive in urban centers or tourists such as Madrid, Barcelona and Mediterranean coasts such as cities such as hotspots.

According to the real estate portal idealista, the country increased by 11 percent in 2024.

A bedroom flat in Barcelona city center is $ 1,313 per month, and $ $ 989 per month outside the city center. The average fare in Barcelona has increased by 53 percent in the last decade.

However, the Spanish cities are still cheaper than many western European cities, where high fare and housing prices have added the cost of living crisis.

In London, which is also facing a housing crisis, the average fare for a bedroom apartment in December 2024 was $ 2,738 per month.

A report from the City Hall in London has revealed that the cost of high fare of the city was inspired by its position as a global economic center, which attracts a large workforce and student population, which increases the demand for housing demand . The demand is coupled with a significant decline in the supply of rental assets since 2020, pushed to the record level.

Sanchez said that in the last 10 years, housing prices across Europe increased by 48 percent, in the same period domestic income almost doubled.

He said, “West has to face a decisive challenge: not to divide a society into two classes, which is one of the rich owners and poor tenants,” he said.

According to the comments published by the government, “We are facing a serious problem with a serious social and economic implications, which requires a conclusive response with public institutions.”

Is the only factor to affect the tourism housing crisis?

Spain is the second most viewed country in the world with more than 94 million tourists in 2024. Tourism produced some $ 200bn in revenue or 13 percent of the country’s GDP (GDP).

Residents in Spain have complained about large -scale tourism, including a spike in numerous behavior by foreigners looking for gentrification, increase in life costs and party looking for party.

However, tourism is not the only factor to contribute to housing crisis in Spain.

The 2008 Spain’s housing bust and the subsequent financial crisis also spoiled the problem. Between 2008 and 2014, Spain experienced a major financial crisis, including a long -term real estate accident.

According to a working paper by the European Central Bank, “As of 2015, house prices had fallen from the 2008 peak to a third, and essentially no new houses were being built”.

The Covid-19 epidemic has also been added to crisis as construction costs have increased significantly since then.

High youth unemployment of 26 percent means that the youth live longer with their parents, slowing down new residential projects. About two-thirds of the Spanish youth between the ages of 18 to 34 live with their parents.

Other factors include complex rules that have slowed down land growth and there is a lack of bank financing and public budget for real estate projects.